Bitcoin Stabilizes at $90,000 Despite Cooling US Inflation

Bitcoin Reacts to US Inflation Data

Bitcoin continues to trade in the $90,000 range following the latest US consumer price data showing moderating inflation. The price surge after the CPI release was accompanied by rising open interest, which according to crypto trader Back suggests new positioning rather than a simple short squeeze ^[1].

The options gamma exposure remains relatively balanced around the spot price, indicating that the price is less constrained and can move as liquidity increases ^[1]. However, the movement was still considered an impulsive act rather than the beginning of a new trend ^[1].

On-Chain Data Shows Stabilization

Data from CryptoQuant suggests that Bitcoin has entered a recovery phase since October ^[1]. Exchange metrics such as Net Unrealized Profit/Loss (NUPL) show that unrealized losses have not deepened further ^[1].

The Inflow Spent Output Profit Ratio (SOPR), which is near breakeven, indicates that coins are being sold close to their acquisition cost rather than in panic ^[1]. The early price surge was mainly driven by liquidity, leaving room for short-term pullbacks as traders reassess their positioning after the initial reaction ^[1].

ECB Keeps Key Interest Rates Unchanged

The European Central Bank has left its key interest rates unchanged at its current meeting ^[2]. The ECB Council decided to maintain the three key interest rates, with the deposit facility rate as well as the rates for main refinancing operations and the marginal lending facility remaining unchanged at 2.00 percent, 2.15 percent, and 2.40 percent respectively ^[2].

The central bank cites stable inflation near its target of 2 percent and stable economic growth as background ^[2]. The deposit rate is considered the most important ECB interest rate because it directly influences how attractive it is for banks to park money with the central bank, thereby significantly controlling short-term market and savings rates ^[2].

Crypto Market Barely Reacts to ECB Decision

The interest rate decision was expected by market observers, so the crypto market is barely moving in response to the news ^[2]. On a daily basis, Bitcoin traded slightly higher at $87,731 ^[2].

Macroeconomic uncertainty continues to dominate market activity ^[2]. More important than the ECB's decision is considered to be the Bank of Japan's decision on Friday, where an interest rate hike is expected that could put further pressure on the crypto market ^[2].